Asset Forfeiture

Response Guide No. 7 (2008)

Introduction

Designed to weaken the economic foundations of the illicit
drug trade, asset forfeiture laws allow for the seizure (and eventual
forfeiture) of property connected with criminal activity.1
Supporters of the practice see it as an essential law enforcement tool.2
Forfeiture has also helped generate considerable revenue for police agencies.

Today there are literally hundreds of federal and state forfeiture
laws3,
and such laws continue to be enacted at near record levels. This response guide
explains the advantages and disadvantages to police of using asset forfeiture
as a response to various crime problems. It also reviews several of the
possible novel uses of forfeiture.

To be of practical use, this guide also examines legal
arrangements from state to state and discusses steps agencies can take to
improve the prospects of receiving forfeiture proceeds. It concludes with a
brief how-to guide that agencies should consider when deciding to launch an
asset forfeiture program.

Target Audience

The target audience for this response guide is, first and
foremost, any law enforcement official who is contemplating starting an asset
forfeiture program in his or her agency. This guide also serves as a refresher
for those currently engaged in the practice. Finally, researchers and others
who are interested in the issues surrounding asset forfeiture should find this
guide helpful.

The Need for Forfeiture

For many years law enforcement agencies around the nation have
faced shrinking budgets.4
Police administrators have been forced to develop creative budgeting
strategies, such as securing federal grants and partnering with community
foundations.5
Though it is an enforcement tool, asset forfeiture can assist in the budgeting
realm by helping to offset the costs associated with fighting crime. Doing what
it takes to undermine the illicit drug trade is expensive and time-consuming. Forfeiture
can help agencies target these difficult problems, sometimes without the need
to seek additional outside resources to offset their costs.

Origins and Varieties of
Forfeiture

Traditionally, forfeiture actions have proceeded upon the
fiction that the inanimate objects can be guilty of wrongdoing. Simply put, the
theory has been that if the object is “guilty,” it should be held forfeit.6
This can shift the attention from the people responsible for the crime (as with
a criminal prosecution) to the property that was derived from or used to
facilitate the crime.

Criminal Forfeiture

When criminal forfeiture is used, it accompanies a criminal
conviction. For example, if a high-profile drug trafficker is convicted of
controlled substance law violations, the convicted’s property that was
connected with such activity may be forfeited. Criminal forfeiture is, by some
accounts7,
less common than civil forfeiture, mainly because of the burden of proof in
criminal cases, namely proof beyond a reasonable doubt.8
Criminal forfeiture is a sentencing option only if the statute used to convict
the offender also provides for forfeiture. Also, when a third party has an
interest in the property subject to forfeiture, ancillary hearings are often
held to ascertain the nature of that interest and make adjustments as deemed
necessary.

Civil Forfeiture

Civil forfeiture has seen its share of controversy not just
because the property rather than its owner is targeted (illustrative cases
include United States v. One Mercedes 560 SEL and United States v. One Parcel of Land at 508 Depot Street9)
but because the standard of proof is considerably lower. In a civil forfeiture
action, the government need prove only by a preponderance of the evidence that
the property in question was used or obtained illegally, thus making it subject
to forfeiture. Civil forfeiture proceedings are independent of criminal
proceedings, and it has been estimated that as many as 90 percent of civil
forfeitures are not accompanied by criminal charges10,
either intentionally or due to insufficient evidence to support a criminal
prosecution.

Civil forfeiture can occur via three mechanisms:

Summary forfeiture occurs when property is summarily
seized. Property subject to summary forfeiture is typically contraband,
such as illegal narcotics and drug paraphernalia.

Administrative forfeiture is usually commenced against
property valued at less than $500,000, or against cash of any value. Administrative
proceedings are conducted by the seizing agency; the government initiates
a forfeiture action and will take ownership of the property if no one
steps forward to contest the forfeiture.†
Real property is not subject to administrative forfeiture, even if it is
valued at less than $500,000. Probable cause is the requisite standard in
administrative forfeiture (as it is roughly analogous to preponderance of
evidence).

Civil judicial forfeiture proceedings occur before a
judge. It is akin to a trial. If the value of the property in question
exceeds $500,000 (or a claim of ownership is filed or real property is
involved), this is the mechanism of choice.

† There are four steps to an administrative forfeiture: (1) Notice of the forfeiture action must be served on all potentially interested parties; (2) Notice of the forfeiture proceeding must be published in a newspaper of general circulation; (3) If no claim opposing the forfeiture is filed during the statutorily required period of actual or published notice, the item is declared forfeit by the administrative agency; and (4) If a claim opposing forfeiture is filed, then the administrative forfeiture proceeding halts and the matter is converted into a judicial forfeiture action (Edgeworth, 2004).

The authors of one study11
found that the assets sought in civil-judicial proceedings were most commonly (48.6
percent) real property. More specifically, of the cases where investigations
were proactive (e.g., a drug bust was planned in advance), the assets were
primarily real property. Of the cases where investigations were reactive (such
as when a traffic stop gave rise to forfeiture), most assets were monetary
instruments. The researchers also studied the values, both real and estimated,
of the assets in civil-judicial forfeiture cases. They found that the real
property was the most valuable, followed by currency, conveyances, and other
property, respectively.

Theories of Forfeiture

There are four forfeiture theories. Property is subject to
forfeiture if it is (1) contraband; (2) the proceeds of criminal activity; (3)
used to facilitate criminal activity; and (4) connected to a criminal
enterprise.

Forfeiture of Contraband

Contraband property is illegal to possess and, as such, is
subject to forfeiture. No one can assert a legal interest in contraband
property, so any property interest in it cannot exist. Again, this is why
summary forfeiture of contraband is acceptable.12

Closely connected to contraband is so-called "derivative
contraband."13
To use a drug example, derivative contraband might be scales used to weigh
substances before sale. Such property is lawful to possess but is subject to
forfeiture because it is used to facilitate crime. It cannot be summarily
forfeited, however. Due process protections apply because one can assert legal
interest in such property.

Forfeiture of Proceeds

The ability to target the proceeds of criminal activity is
what makes forfeiture particularly attractive from a police standpoint. The
proceeds of criminal activity can be several, including "...all interest,
dividends, income, or property derived from the original illegal transaction...,
including the appreciation in the value of the property."14
Proceeds can be targeted for forfeiture if they are connected to criminal
activity in general. That is, there is no requirement that the proceeds
be obtained directly from an illegal act. For example, if an individual
sells drugs for cash, uses the cash to buy a car, sells the car, and then uses
the money to contribute to a down payment on a home, the latter could be
considered proceeds—but only the portion purchased with illicit funds.15

Although the ability to target proceeds of criminal activity
is attractive, it can be difficult for the government to prove a connection
between the property sought and the initial criminal act. The current
requirement is that the government prove a "substantial connection" between the
property to be forfeited and the criminal activity from which it is considered
a proceed. A general suspicion of criminal activity is not sufficient to take
an asset forfeiture case forward.

Facilitation Forfeiture

Forfeiture extends beyond criminal proceeds to include
property that is used to facilitate, or carry out, criminal activity. Such
forfeitures can include property that "is used or intended to be used in any
manner or part to commit or facilitate the commission of a violation..."16
A facilitation forfeiture is sometimes called an instrumentality forfeiture,
meaning the property targeted for forfeiture was instrumental to the commission
of the crime. An example is a car used to transport illegal drugs for sale.

Enterprise Forfeiture

Enterprise forfeiture targets an offender's interest in any
enterprise involved in criminal activity. Federal law provides that "... in the
case of a person convicted of engaging in a continuing criminal enterprise...,
the person shall forfeit, in addition to any property described in (1) proceeds
or (2) instrumentality, any of his interest in, claims against, and property or
contractual rights affording a source of control over, the continuing criminal
enterprise."17
This is sweeping language because it reaches the offender's entire
interest in a criminal enterprise. An example is the case of United States
v. Cauble18,
where the government forfeited a partnership interest in a ranch on the theory
that the defendant used it for his drug smuggling operation. This type of
forfeiture is relatively rare and tends to be limited to racketeering cases.19

Forfeiture Laws and Sharing

Forfeiture laws engender considerable controversy because
many of them have sharing provisions. Federal law and most state laws provide
that a certain amount of forfeiture proceeds can go back to the police agency
(or agencies) that set the wheels in motion. There is also considerable
collaboration between federal officials and local police, for reasons this
section summarizes.

The amounts of money that move between state governments and
the federal level are significant. In FY2007, for example, more than $1.5
billion20
was deposited from the states into the U.S. Department of Justice Assets
Forfeiture Fund. However, this figure does not reflect the total amount of
proceeds forfeited, because, as the following section explains, pursuing
federal forfeiture is not always attractive to local agencies.

Federal Law

When cash is forfeited, it is transferred to the appropriate
asset forfeiture fund.†
Personal and real property is sold at auction, and, once sales costs are
deducted, remaining proceeds are deposited into the fund. In FY2007, more than
$71 million in real property was sold, the proceeds from which were placed in
the Justice Department's Assets Forfeiture Fund. Federal agencies can also
retain personal property, such as certain conveyances, for law enforcement
purposes. In FY2007, 465 items valued at more than $6.7 million were placed
into law enforcement use from the Justice Department's Assets Forfeiture Fund.21
Forfeiture fund monies are also retained to care for real property, pay
informants, and fulfill other obligations related to property (such as paying
off lien holders).

† The Comprehensive Crime Control Act of 1984 (Public Law 98-473) established the U.S. Department of Justice Assets Forfeiture Fund (see Appendix A for other relevant federal forfeiture laws). The fund is set up to receive the proceeds from forfeiture resulting from the Justice Department law enforcement agencies (e.g., the FBI, DEA, ATF). Another fund, housed in the Department of the Treasury, is the Treasury Forfeiture Fund (31 U.S.C. § 9703[a]). Treasury Department law enforcement agencies (e.g., the Secret Service) participate in this fund

Equitable Sharing

Numerous federal statutes22
provide that local police agencies can team up with federal law enforcement
officials in a practice known as adoptive forfeiture. An adoptive forfeiture
occurs when local police officials effectively hand a case over to federal
officials (e.g., Drug Enforcement Administration, which then passes it off to
the U.S. Attorney's Office in the case of civil-judicial forfeiture). A key
restriction is that the property in question is forfeitable under federal law. Proceeds
from successful adoptive forfeitures are managed by the appropriate federal
forfeiture fund and, importantly, as much as 80 percent of adoptive forfeiture
proceeds can be returned to the initiating state or local police agency (or
agencies).†

† The federal share is 20 percent if all the preseizure activity was conducted by a state or local agency. This does not necessarily mean, however, that 80 percent automatically goes to such agencies. The share is based on the number of agencies involved and on each agency's degree of participation in an investigation. This is usually determined by the number of hours contributed by personnel.

The Adoptive Forfeiture Process

The process begins with a request for adoption,†
which is then reviewed by the appropriate federal agency. If a forfeiture is
adopted, the process continues to unfold as follows:

An
agreement is signed, in which the local law enforcement agency promises the
proceeds "shall be used for law enforcement purposes in accordance with the
statutes and guidelines that govern equitable sharing" and also that they will
be used as the local agency specified in the application it submitted
requesting equitable sharing in that case. The agreement also states that "the
misuse or misapplication of shared resources is prohibited" and will subject
the local agency to sanctions.23

† A request for adoption form is at www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/crm02288.htm

When the proceeds from an adoptive forfeiture are shared
with the participating local agency (or agencies), this is known as equitable
sharing. Equitable sharing proceeds are considerable. During FY2007, for
example, more than $400 million was paid out by the U.S. Justice Department's
Assets Forfeiture Fund to state and local police agencies.

Despite the possible windfall that can result from an
equitable sharing payout, there are a few restrictions on how the proceeds can
be spent. First, payments are intended to enhance and supplement police
resources and activities. Second, property and funds awarded must be used in
accordance with specific federal guidelines: "Permissible uses of shared
property include activities designed to enhance future investigations, such as
payment of overtime, provision of police training, purchase of equipment,
improvement of police facilities, upgrading of detention facilities, and
conducting drug education awareness programs."24
Third, there is an express requirement that the funds not be used to
supplant agency resources.

State Law

State laws vary considerably in terms of how forfeited assets
are to be disposed. At the risk of simplification, there are basically three
distribution formulas. First, a number of states, such as Nevada, permit the
return of all forfeiture proceeds to the initiating agency.25
At the opposite extreme, a number of states permit do not permit the return of proceeds
to law enforcement. Missouri, for example, requires that forfeiture proceeds be
placed into an education fund.26
All other states allocate forfeiture proceeds based on complicated formulas
that involve multiple agencies, restrictions, and other limitations. Therefore,
it is useful to think in terms of "generous" states, "restrictive" states, and
states with "alternative arrangements" (also see Appendix B for a list of
disposition statutes by state).

Generous States

Generous forfeiture states allow forfeiture proceeds to be
retained for official use. Nevada, for example, requires that the governing
body controlling a police agency that pursues forfeiture open a special account
known as the "... Forfeiture Account" and requires, simply, that "The money in
the account may be used for any lawful purpose deemed appropriate by the chief
administrative officer of the law enforcement agency."27
To avoid having too much money accumulate in the fund, the law mandates that at
the end of each fiscal year a percentage of the fund in excess of $100,000 be
distributed to local schools.

Several other generous forfeiture states (e.g., Montana, Oklahoma) permit local agencies to retain forfeited property for official use;
however, if they sell such property, the law may require that the proceeds be
deposited into some type of law enforcement fund. For example, South Dakota's law requires that "All moneys seized or remaining proceeds from the sale of
any forfeited property shall be paid into the drug control fund" or forwarded
to the state's Bureau of Narcotics and Dangerous Drugs.28
Local agencies can then apply for and receive any or all of the funds they were
required to deposit in the drug control fund.29

Restrictive States

Restrictive forfeiture states either (1) have no laws governing
the disposition of forfeited assets, or (2) place the funds in a law
enforcement trust fund of sorts, or (3) require that funds be paid into other
non-law enforcement funds. For example, Maryland and Vermont require forfeiture
proceeds be paid into a state or county general fund30,
whereas Minnesota requires the proceeds be paid into a state general
fund.31

Asset forfeiture critics have argued that officials in
restrictive forfeiture states are most inclined to pursue adoptive forfeitures
due to the prospect of receiving proceeds. A series of articles in The Kansas
City Star detailed examples of law enforcement officials in Missouri, a state that allows no forfeiture proceeds to go to law enforcement32,
bypassing state law in favor of adoptive forfeitures.33
A recent study reached similar conclusions, namely that police agencies in
restrictive states receive more equitable sharing payments than their
counterparts in generous forfeiture states.34

Alternative Arrangements

In states whose forfeiture disposition formulas permit less
than 100 percent but more than none go to law enforcement agencies, the
percentages range from 25 percent, as in Hawaii35,
to 90 percent, as in West Virginia.36
Some states also allow certain percentages to go to prosecutors. For example, Colorado permits 10 percent37,
and California permits as much as 25 percent.38
Still other states combine these percentages with distributions based on the
level of involvement by each investigating agency39,
the role each agency plays40,
or local agreements. Texas is an example of the latter; distribution is based
on agreements arranged by prosecutors.41

Benefits of Forfeiture

Asset forfeiture is beneficial for at least three reasons. First,
it is intended to reduce criminal activity by denying offenders the profits
from their crimes. Second, a byproduct of asset forfeiture is more drug
arrests. Third, yet perhaps most controversially, forfeiture helps
cash-strapped law enforcement agencies augment their discretionary budgets to
further target criminal activity.

Crime Reduction

Much of the language surrounding forfeiture is couched in
terms of removing the profit from criminal activity, but at its core, forfeiture's
objective is crime deterrence. Because incarceration (or the threat of such)
does not deter all offenders, forfeiture is intended to pick up where
traditional punishments leave off. It has been said that "[t]he criminal views
the prospect of a jail sentence as a calculated cost of generating revenue…"
and that "[r]ecidivism is encouraged because the subject has learned that crime
does pay."42

Unfortunately, not a single published study has linked
forfeiture activities to the prevalence of criminal activity. A team of
economists recently offered up a theoretical argument concerning the possible
deterrent effect of forfeiture, but they also argued that a mix of
sanctions, not just forfeiture, would be most ideal: "by employing a mix of
sanctions, with harm-based fines (or other punishment) plus confiscation of
illegal gain [i.e., forfeiture], courts will be able to get closer to efficient
deterrence than they can when constrained to use punishments in isolation."43

Despite the lack of evidence that forfeiture can reduce a
variety of crimes, there is some evidence that forfeiture can effectively
address a number of specific problems. This guide considers several such
problems in the "Problems for Which Forfeiture is a Remedy" section below.

More Drug Arrests

As is clear by now, there are financial incentives for
police agencies to pursue asset forfeiture. This raises a proverbial "chicken or
the egg" question: Do forfeiture laws increase enforcement activity, or does
enforcement activity increase the prospects for asset forfeiture? One study
found that state forfeiture laws are closely connected to drug arrests, and,
secondarily, to forfeiture. In other words, states with the most generous
forfeiture laws, those that return the greatest percentage of forfeiture
proceeds to police, saw the greatest arrest activity: "police focus relatively
more effort on drug control when they can enhance their budgets by retaining
seized assets."44
Controversially, this takes the focus from finding solutions to specific crime
problems to revenue generation. Yet it is difficult to fault police departments
for seeking revenue to support continued crime fighting.

Whether more drug arrests are desirable depends, of course,
on the particular drug-related problem. Careful analysis of a local drug
problem should be conducted before making this judgment. If, for example,
high-volume drug arrests overwhelm the courts and/or compromise public support
for law enforcement efforts, then more drug arrests (and, by extension,
forfeiture) may be undesirable.

Budget Boost

The obvious advantage of asset forfeiture is its potential
to boost an agency's bottom line. Although forfeiture can yield a profit,, it
can be sufficient for forfeiture to simply yield enough proceeds to offset the
costs of drug enforcement, such as the operation of a multijurisdictional drug
task force. Researchers have found, indeed, that forfeiture can assist agencies
by augmenting their discretionary budgets.45

Possible Criticisms and
Negative Consequences

Forfeiture also has been fairly heavily criticized. Critics
point to the "drug war's hidden economic agenda"46
and refer to the means by which forfeiture compromises due process protections47
and encourages law enforcement blunders.48
Critics further claim that forfeiture circumvents proper appropriations
channels, threatens due process protections, and guarantees a conflict of interest
between effective crime control and creative financial management.

The Civil Asset Forfeiture Reform Act of 2000 (CAFRA)49
made several changes to federal forfeiture law. Key provisions of the law
include the creation of an innocent owner defense (for cases in which an
innocent individual's property is targeted for forfeiture) and a shift in the
burden of proof from the property owner to the government. Concerning the
latter, property owners were previously required to prove their property was
not subject to forfeiture. Now the government must prove by a preponderance of
the evidence that property is subject to forfeiture. Although CAFRA minimized
much of the controversy associated with asset forfeiture, several criticisms of
the practice still stand out.

Profit Motive

In a rather creative study, Miller and Selva50
used covert participant observation to document asset forfeiture activities. One
of the authors acted as a confidential informant for a city's undercover
narcotics operation after he established a relationship with drug enforcement
officials in the area. The results of the study were startling; agents were
selective in their enforcement efforts, and the goal of seizing assets took
precedence over the goal of taking narcotics out of circulation.†

† Referring to one case where a drug dealer received a large quantity of cocaine, Miller and Selva reported the following: "The researcher...was surprised when he was instructed to observe the suspect's transactions to determine the rate at which the cocaine was being resold. Less drugs meant more cash, and the agent’s objective was to seize currency rather than cocaine. The case was successful as to proceeds, but perhaps not in view of the quantity of cocaine that officers knowingly permitted to reach consumers" (Miller and Selva, 1994, p. 328).

The Miller and Selva study was published in 1994, well
before federal forfeiture reforms were put in place. Even so, some more recent
studies have raised similar concerns. For example, the author of one study
surveyed 1,400 law enforcement administrators from around the nation and found
that more than 60 percent of them either agreed or strongly agreed with the
statement that "forfeiture is a necessary budgetary supplement for my agency."51
The authors of another study found that law enforcement agencies in restrictive
forfeiture states receive considerably more equitable sharing payments than
their counterparts in generous forfeiture states.52
The logic is that the agencies in restrictive forfeiture states teamed up with
federal officials to participate in adoptive forfeitures, in an effort to
enhance the prospects of receiving forfeiture proceeds.

In fairness, at least one published study showed that
forfeiture activities have no apparent connection with state legal arrangements.53
In particular, "asset forfeiture does not have a substantial impact on the
policing priorities of local agencies."54
The study, which was limited to jurisdictions in Ohio, also found that agencies
pursued criminal forfeiture more often than civil forfeiture. The reason for
this is that Ohio civil forfeiture laws require that a criminal prosecution
accompany a civil forfeiture action.55

Budget Consequences

One of the advantages of forfeiture identified earlier is
its ability to augment discretionary budgets. This can be a disadvantage, too,
particularly if budget-setting authorities catch wind of an agency's successes
with forfeiture. Some jurisdictions have reportedly supplanted (or shorted)
regular police operating budgets on the assumption that police could make up
the shortfall with asset forfeiture.56
As the authors of one study observed:

Local governments capture a
significant fraction of the seizures that police make by reducing their other
allocations to policing, partially undermining the statutory incentive created
by seizure laws...Police, in turn, respond to the real net incentives for
seizures once local offsets are taken into account, not simply the incentives
set out in statute. When police are really allowed to keep the assets they seize,
they increase anti-drug policing.57

Neglect of Other Crimes

Forfeiture laws tend mostly to target "consensual" crimes
and those with the greatest potential for profit. To the extent law enforcement
agencies are drawn to forfeiture due to the potential to receive proceeds, this
could discourage them from channeling resources into areas where the potential
to receive forfeiture proceeds is nil. At the least, generous forfeiture laws
appear to increase agencies' enforcement activities in areas where the chances
of receiving proceeds are greatest. As one study concluded, since the
Comprehensive Crime Control Act of 1984, "[t]he relative allocation of state
and local law enforcement resources has shifted dramatically towards drug
enforcement, the major source of asset confiscations."58
In fairness, though, it can be argued that much of the nation was focused on
waging a war on drugs during that time, irrespective of forfeiture laws.

Appearance of Impropriety

Forfeiture windfalls can also reek of impropriety. For example,
some small town agencies have received an excess of forfeiture proceeds and
used the money to purchase items that some considered unnecessary.59
Some jurisdictions have also received negative publicity for controversial plea
agreements with known drug offenders. In one case, a dealer faced 15 years in
prison under one state's tough anti-drug laws. The dealer surrendered his
interest in $31,300 in cash seized from his apartment and received only a five-year
prison term. Plea agreements such as these raise several questions, and, to
some, seem like a version of sanctioned extortion. Researchers have uncovered
many other examples of questionable forfeiture-related plea agreements that
look at least somewhat questionable.60

Threats to Due Process

Asset forfeiture has been extensively criticized on
constitutional grounds.61
Critics allege that forfeiture violates, among other constitutional provisions,
(1) the Fifth Amendment's double jeopardy clause; (2) the due process clauses
of the Fifth and Fourteenth Amendments; and (3) the Eight Amendment's excessive
fines and punishment clauses.

Concerning the first challenge, the U.S. Supreme Court held
that civil asset forfeiture does not violate the Fifth Amendment's double jeopardy
clause.62
In other words, asset forfeiture does not constitute "punishment" in the
traditional sense. In contrast, the Supreme Court held that forfeiture can
violate due process.63
At one point, there was no federal requirement that interested owners be
notified before their property was forfeited. The Court held:

the seizure of real property...is not
one of those extraordinary instances that justify the postponement of notice
and hearing. Unless exigent circumstances are present, the Due Process Clause
requires the Government to afford notice and a meaningful opportunity to be
heard before seizing real property subject to civil forfeiture (p. 62).

In another important case64,
the Supreme Court addressed a challenge to a civil forfeiture action on the
grounds that it violated the excessive fines clause of the Eighth Amendment. It
held that "forfeiture generally and statutory in rem forfeiture in
particular, historically have been understood, at least in part, as punishment"
and that "[w]e therefore conclude that forfeiture under these provisions
constitutes 'payment to a sovereign as punishment for some offense,' and, as
such, is subject to the limitations of the Eighth Amendment's Excessive Fines
Clause."65

Problems for Which
Forfeiture is a Remedy

Asset forfeiture is not limited to drug enforcement. It can
be used to target a wide range of crime-related phenomena.66
This section briefly reviews asset forfeiture laws that target illegal drug
markets and those that target profits from other types of criminal activity. These
are some of the most promising areas in which law enforcement officials can
pursue asset forfeiture.

Illegal Drug Markets

The 1970 Comprehensive Drug Abuse Prevention and Control Act
provided for the forfeiture of property used in connection with controlled
substances. Since then various federal statutes have been enacted and extended
the reach of asset forfeiture.67
This legislative progression has made forfeiture a viable enforcement option
for a wide variety of drug-related offenses.

In terms of specific drug-related problems, forfeiture has
been used in response to everything from drug dealing at apartment complexes†
to the operation of clandestine methamphetamine laboratories††.
Officials must take care, however, to ensure the property targeted for
forfeiture is sufficiently valuable in relation to the time and effort required
to execute a well-planned bust.

Nuisance Properties

Fulton County (Atlanta), Georgia's Neighborhood Fresh Start is
an example of law enforcement officials' use of state forfeiture laws to target
nuisance properties.68
Prosecutors target houses plagued with drug activity for at least two years. Ideally,
the house has had at least five arrests for drug-related activity or two
previous search warrant incidents in which drugs were found. They weigh the
value of the house against the amount of drugs and contraband seized—mainly due
to Eighth Amendment concerns. The chief of police then sends the owner a cease-and-desist
letter. The letter is followed by additional surveillance, undercover drug
buys, and enforcement. If the activity continues, forfeiture is pursued. In a successful
forfeiture, ownership of the house is transferred to the state and the district
attorney, and the county moves a police officer into the home. The officer pays
a nominal amount of rent and serves as a community resource officer, working
only the beat in which the house is located. After the officer lives in the house
for a year, the county works with the United Way and other charitable
organizations to move a low-income family into the home.

Another class of nuisance properties includes so-called
"budget motels."†
In some communities, these properties are responsible for a disproportionate
number of calls for service. Because these motels offer cheap accommodations,
usually accept cash, do not take many steps to limit certain types of clientele
who frequent the premises, and tend to be located in already crime-prone areas,
it is no surprise that problems occur. Prostitution, drug dealing, loud
parties, and other activities seem to happen frequently. The usual strategies of
patrolling the properties and arresting offenders may not be as effective as
targeting the assets of owners who turn the proverbial "blind eye" to problems
at their motels. Several jurisdictions have used state nuisance laws to forfeit
such properties. In many cases, however, the mere threat of forfeiture
encourages property owners to take steps toward cleaning up and otherwise
improving their properties.

Street Racing†

In response to a surge in illegal street racing fatalities
on city streets, San Diego enacted the nation's first anti-street racing
forfeiture ordinance.††
In general, the law provides for forfeiture of vehicles used in illegal speed
contests. Before forfeiture is pursued, however, law enforcement must confirm
that the person whose vehicle is targeted has a previous Vehicle Code
conviction. Despite this additional restriction, research suggests the
ordinance has reduced the street racing problem in San Diego. In particular, an
evaluation of the program revealed that the ordinance did more to reduce the
street racing problems than other law enforcement activities (such as increased
arrests and prosecutions for Vehicle Code violations), negative press coverage
of street racing, and sanctioned races at a local stadium on weekends.69

†† "...a motor vehicle shall be declared a nuisance and forfeited subject to this division if…[i]t is used in violation of California Vehicle Code §§ 23109(a) or (c); and…it is being driven by the registered owner of the vehicle, the registered owner is a passenger, the registered owner’s immediate family members is driving or riding in the car, or the driver or passenger lives at the same address as the registered owner" (San Diego Municipal Code, Chapter 5, Article 2, Division 52.5301).

Drunk Driving†

The federal Transportation Equity Act for the 21st
Century, enacted in 199870,
requires that state laws contain provisions for seizure and/or forfeiture of
the vehicles used by repeat drunk driving offenders. States that fail to do so
risk losing federal funding. Although most of the laws provide for temporary
impoundment, such as in an impound lot, some provide for permanent forfeiture
of the vehicles. No matter the means of depriving repeat drunk drivers of their
vehicles, researchers have found that such statutes result in considerable
deterrent effects. For example, an Ohio study found that the reduction in DWI
offenses for first-time offenders was 80 percent during the impound period,
followed by 56 percent after.71
Similar results were reported in California72
and Portland, Oregon, evaluations.73

New York City's Vehicle Forfeiture Initiative74
is perhaps the most punitive in the United States. It provides for forfeiture
for first-time offenders. Since 1999, the ordinance has been used to forfeit more
than 6,500 vehicles, leading some to conclude that it "has saved many lives by
encouraging people to refrain from drinking and driving."75
Critics, though, feel the prospect of forfeiture following a first-time offense
is excessive: "The policy is an obvious attempt to punish, and it operates by
subjecting the automobiles of DWI offenders to forfeiture regardless of their
value or the harm that the offender caused."76

Drivers with Revoked Licenses

Forfeiture laws have been expanded to cover vehicles driven
by those with revoked licenses. For example, California's Vehicle
Code77
provides that "a motor vehicle is subject to forfeiture as a nuisance if it is
driven on a highway in this state by a driver with a suspended or revoked
license, or by an unlicensed driver, who is a registered owner of the vehicle
and has a previous misdemeanor conviction…" under one of several other related
Vehicle Code provisions.

Researchers have been hesitant to claim that
forfeiture laws such as those in California are effective.78 Why? The explanation one team
of researchers offered is that officials in California readily use the state's
temporary impoundment provision (for first-time offenders) much more often than
they use the forfeiture provision. The researchers found two reasons for this: there
is little support of forfeiture from district attorneys and the costs of moving
forward with forfeiture actions often exceeded the value of the vehicles
targeted.79

Prostitution

Prostitution is a significant problem for many
jurisdictions. A wide range of enforcement options are available: intensive
enforcement, banning prostitutes from certain areas, imposing curfews,
manipulating the physical environment, offering services to prostitutes, and,
of course, targeting the "johns" and their property.†
Portland, Oregon, is credited with being among the more aggressive
jurisdictions when it comes to targeting the property—particularly the
vehicles—of prostitution clients. The vehicles are often seized up front, but
many are returned to prostitution clients who submit to deferred prosecution
arrangements. The prospect of losing one's mode of transportation has
apparently resulted in low recidivism rates.80

Implementing a Forfeiture
Program

Three steps should be followed in setting up an asset
forfeiture program.81,
†
First, police administrators should formulate a mission statement conveying the
purpose of the forfeiture program. Second, with the help of appropriate legal
counsel, adopt appropriate policies and procedures to ensure the forfeiture
program operates within legal boundaries. As this response guide has made
clear, forfeiture's legal requirements vary considerably from one jurisdiction
to the next and can be rather complicated. Third, consider the resources
necessary to start and sustain a forfeiture program. The department needs to be
committed to launching the program, because, at least in the beginning, the
costs associated with personnel training, administration, and investigation will
surely exceed any financial benefits from forfeiture actions.

Once a mission statement and appropriate policies are
adopted, investigators can pursue forfeiture actions in consultation with the
attorney (e.g., prosecutor) who will represent the government if the case goes
to trial. This individual should be updated throughout the investigation, as he
or she will be helpful in determining whether to pursue civil or criminal
forfeiture. It is also worthwhile for agencies to consider collaborating with
other agencies that have successfully forfeited assets in the past. Once a
program is launched and assets are successfully seized, it is critical for the
department to safeguard the property in question until all legal disputes are
resolved. This can include everything from appraising automobiles and storing
jewelry to depositing cash into a bank account and maintaining real property.82

Ethical Considerations

In response to negative publicity and criticism of
forfeiture (especially civil forfeiture), the U.S. Department of Treasury's Executive
Office for Asset Forfeiture drafted a National Code of Professional Conduct for
Asset Forfeiture (see Appendix C). It consists of "ten commandments" to federal
agencies on the proper use of asset forfeiture. Not long after the National
Code of Professional Conduct was drafted, the National District Attorneys
Association (NDAA) assembled a task force that developed their Guidelines for
Civil Asset Forfeiture (see Appendix D). The NDAA guidelines have been adopted
in several states.83
In general, these documents emphasize that the core purpose of forfeiture is
enforcement, not revenue generation. They also place great emphasis on avoiding
corruption, ensuring procedural fairness, and maintaining accountability.

Avoiding the Negative

The "Possible Criticisms and Negative Consequences" section
above may give the impression that forfeiture's negatives outweigh its
positives. Nothing could be further from the truth. First, it is important to
be at least aware of forfeiture's possible downsides. Second, many of
the criticisms were offered up well before major forfeiture reform (i.e.,
CAFRA) was enacted. Such reforms have made significant strides in terms of
protecting property owners' due process rights and ensuring that forfeiture
practices remain ethical and effective. Third, any effective crime control
strategy needs to be balanced against the possible argument that it threatens
people's rights. Whether the specific strategy is intensive street-level
enforcement, aggressive use of investigative detentions, putting more police
officers on the streets, or carrying out sting operations, it is almost always
likely that there will be critics who oppose the practice. Forfeiture is no
different. It is controversial because it has such potentially powerful
economic consequences. Finally, no matter the pros or cons associated with
forfeiture, it is difficult to fault financially strapped law enforcement
agencies for seeking resources to continue their crime-fighting efforts.

Bringing the Community on Board

One possible strategy to minimize any potential fallout
associated with forfeiture is to bring the community on board from the outset. This
occurred in the early days of Atlanta's Neighborhood Fresh Start initiative
(see above). There, from the start, prosecutors met with and engaged residents
to identify problems. Rather than take a top-down approach of defining what
problems should be targeted, prosecutors went to community meetings and
gatherings to learn residents' problems and concerns. The program's success may
also be attributed to the fact that prosecutors went into the community first,
and the police department had little to no involvement at the beginning. Relationships
between the police and residents of the Fresh Start neighborhood were strained,
but prosecutors were unfamiliar faces in the community. Their appearance on the
scene afforded an opportunity to build trust and communication right from the
start without having to deal with any strained relationships that could have
interfered with progress.

The "Planning Unit"

Before enacting a forfeiture program, consider forming a
planning unit that consists of representatives from various government
agencies, including the police department, the code enforcement agency, the city
council, the mayor's office, the city attorney's office, or any combination of
these and other local agencies. Such a unit, however composed, should then hold
scheduled meetings with community members to identify problems and formulate
appropriate solutions. Then the planning unit representatives can pool their
resources and determine (especially with consultation from the city attorney or
the prosecutor's office) whether forfeiture is a viable option for the problem
in question. This grass-roots, ground-up approach could pay huge dividends in
terms of getting the word out that forfeiture is an option and securing
community support for its use—in the beginning.

Evaluating Success

There is no "one best way" to evaluate asset forfeiture
success, but at least four important issues should be considered. First, because
forfeiture can offset the costs associated with targeting certain crime
problems, agencies should weigh assets forfeited against the actual costs of
enforcement. When forfeiture proceeds outweigh enforcement costs, forfeiture
can be declared a success—at least from a budgetary standpoint.

Second, community feedback should be secured along the way,
particularly when assets such as real property and other valuables are subject
to forfeiture. This may not be of particular concern to some agencies, but
community members may get upset if it appears the government is taking people's
property unfairly. This happened in the early days of Fulton County's Neighborhood Fresh Start (again, see above).

Third, agencies should weigh seizures against forfeitures. Because
most forfeitures are finalized following a court proceeding, it is worth
knowing how many items targeted for forfeiture through seizure actually end up
forfeited. This is akin to the relationship between arrests and convictions. A
significant drop-off in forfeitures relative to seizures would be not unlike a
significant drop-off between arrests and convictions.

Finally, one of the goals of forfeiture should be to promote
fairness. This raises the question of whether case dispositions are appropriate
for the offense in question. Reasonable care can help agencies overcome the
problem of forfeited property values, significantly outweighing the seriousness
of the underlying offense. As mentioned earlier in this guide, excessive
forfeiture can constitute an Eighth Amendment violation.

Conclusion

Asset forfeiture provides a valuable tool for law
enforcement officials, as it helps strike at the economic foundations of
criminal activity. It has been used successfully to target a variety of crime
problems, ranging from illegal drug sales and street racing to nuisance
properties and drunk driving. Forfeiture can also help agencies offset the
costs of reducing crime through laws that permit them to receive forfeiture
proceeds and equitable sharing arrangements. Yet forfeiture is a controversial
practice. Critics cite excessive use of civil, in lieu of criminal, forfeiture
due to the former's lower standard of proof, though some studies revealed this
does not occur. Critics also oppose the practice of distributing asset
forfeiture proceeds among law enforcement agencies. Indeed, researchers and
reporters have uncovered some examples of dependence on forfeiture in law
enforcement circles and possible distortion of goals in the ongoing war against
crime. With due diligence and attention to appropriate codes of professional
conduct, law enforcement officials can implement asset forfeiture programs that
meet all legal requirements, protect property owners' rights, and effectively
target criminal activity.

Appendix C: National Code of Professional Conduct for Asset
Forfeiture

Law enforcement is the
principal objective of forfeiture. Potential revenue must not be allowed
to jeopardize the effective investigation and prosecution of criminal offenses,
officer safety, the integrity of ongoing investigations, or the due
process rights of citizens.

No prosecutor's or sworn law
enforcement officer's employment or salary shall be made to depend upon
the level of seizures or forfeitures he or she achieves.

If no judicial finding of
probable cause is secured, the seizure shall be approved in writing by a
prosecuting or agency attorney or by a supervisory-level official.

Seizing entities shall have a
manual detailing the statutory grounds for forfeiture and all applicable
policies and procedures.

The manual shall include
procedures for prompt notice to interest holders, the expeditious release
of seized property where appropriate, and the prompt resolution of claims
of innocent ownership.

Seizing entities retaining
forfeited property for official law enforcement use shall ensure that the
property is subject to internal controls consistent with those applicable
to property acquired through the normal appropriations process of that entity.

Unless otherwise provided by
law, forfeiture proceeds shall be maintained in a separate fund or account
subject to appropriate accounting controls and annual financial audits of
all deposits and expenditures.

Seizing agencies shall strive
to ensure that seized property is protected and its value preserved.

Seizing entities shall avoid
any appearance of impropriety in the sale or acquisition of forfeited
property.

The removal of unlawfully obtained proceeds of criminal
activity and the elimination of the instrumentalities used to commit
crimes are the principal goals of asset forfeiture. Potential revenue must
not be allowed to jeopardize the effective investigation or prosecution of
criminal offenses.

Where multiple agencies in a geographic region have
jurisdiction to pursue asset forfeiture, every effort should be made to
cooperate to advance the public interest.

Every government entity with the authority to seize property
should ensure that its asset forfeiture program provides for: (a) Prompt
prosecutorial review of the circumstances, and propriety of the seizure;
(b) Timely notice of seizure to interest holders of seized property; and
(c) Expeditious resolution of ownership claims and a rapid release of
property to those entitled to the return of the property.

Absent exigent circumstances, a judicial order is
advisable for all seizures of real property. When real property in
residential use is sought to be forfeited, the least intrusive means that
will preserve the property for forfeiture and protect the public should be
employed. A notice of lis pendens or an order restraining
alienation should suffice to preserve the government's interest in
forfeiture pending final judicial determination of the forfeiture action.

Every entity retaining forfeited property for official law
enforcement use should ensure that the property is subject to controls
consistent with those applicable to property acquired through the normal
appropriations process.

No seized property should be used without judicial
authorization and/or supervision. A use order may be obtained from the
court in appropriate circumstances. Otherwise the property should not be
used unless the forfeiture action has been completed and title to the
property has vested in the receiving agency. Forfeited property not used
in an undercover capacity should be sold or added to the regular inventory
of the agency. All property should be used and disposed of in a manner consistent
with the use and disposition of similar property by that agency.

The disposition of forfeited property retained by the law
enforcement agency should not be determined by any person who directly
supervised or exercised discretion in its forfeiture.

Forfeiture proceeds shall be maintained in a separate fund
or account subject to appropriate accounting controls and annual financial
audits of all deposits and expenditures.

Every seizing agency should maintain seized property to
preserve value for successful claimants as well as the taxpayers.

To the extent possible, civil forfeiture actions should be
initiated as independent cases which are not controlled or influenced by
the criminal prosecution. Prosecutors should avoid plea agreements in a
criminal case which involve agreements to dismiss forfeiture proceedings. The
converse is also true. Prosecutors should avoid settlements in a
forfeiture case which involve concessions in a criminal proceeding.

Every prosecutor should establish procedures to ensure
expeditious resolution of ownership claims if challenges to the asset
forfeiture proceeding are made and timely return of the property to the
known owner or interest holders if the forfeiture action is dismissed or
is unsuccessful.

Salaries and personal benefits of any person influencing
or controlling the selection, investigation, or prosecution of forfeiture
cases must be managed in such a way that employment or salary does not
depend upon the level of seizures or forfeitures in which they participate.

Agency employees and their families should be prohibited
from purchasing forfeited property directly or indirectly from the agency,
or any property forfeited by any other agency, if the employee
participated in any aspect of the investigation or litigation involving
that property.

Agencies receiving forfeiture funds should make annual
budget requests based on agency funding needs without regard for
anticipated or projected asset forfeiture revenues.

Prosecutors should pursue forfeiture actions to further
the remedial goals set forth above. A prosecutor should not consider any
personal or political advantages or disadvantages or gains or losses that
the initiation of a forfeiture action may bring to the prosecutor's office
in deciding whether to initiate or dismiss a forfeiture proceeding. Nor
should a prosecutor improperly consider the race, gender, social or
economic status of any person in deciding whether to initiate or dismiss a
forfeiture proceeding. This guideline should not be read to preclude the
initiation of forfeiture proceedings, which contribute to the fulfillment
of the official mission of the prosecutor's office.

Terry, D.
(2000). "Take a Drink, Lose a Car: The Constitutionality of the New York City Forfeiture Policy, As Applied to First-Time DWI Offenders, In the Wake of
Recent Excessive Fines and Double Jeopardy Clause Jurisprudence." Ohio State Law Journal 61(5):1793-1840.

United States
Department of Justice (1994). Annual Report of the Attorney General of the United States. Washington, D.C.: Office of the Attorney General.